Monday, July 16, 2018

Russia enters into the Helsinki Summit talks with one of its largest banks accelerating its dumping of the dollar

Russia has been by far the largest economy to embark upon a dollar dumping program when you look at the percentage of dollar reserves they have transferred into gold or other currencies.  And as President Vladimir Putin enters into talks with President Trump here on July 16, he does so with a new report out over the weekend where one of his nation's largest banks has accelerated the dumping of dollars.

One of Russia’s largest banks, VTB is seeking to decrease the share of US dollar transactions at home as locals are choosing the Russian ruble over the greenback. 
“There is one interesting thing I wanted to highlight. Since the beginning of this year, people seem to be less interested in making dollar deposits or taking out dollar loans, compared to ruble-denominated deposits and loans. We believe this to be an important step towards the de-dollarization of the Russian finance sector,” said VTB head Andrey Kostin at a Kremlin meeting with President Vladimir Putin. 
Russia has been seeking the ways of decreasing the dependence on the US currency after Washington and its allies imposed sanctions against Moscow in 2014. In May, President Putin said Russia can no longer trust the US dollar-dominated financial system since America is imposing unilateral sanctions and violates World Trade Organization (WTO) rules. Putin added that the dollar monopoly is unsafe and dangerous for the global economy. - Russia Today
Movement away from dollar hegemony by Russia has been going on since 2012 when the Eurasian energy giant initiated its first bi-lateral oil contract with China.  And ever since that time, Russia has embarked on a combination of gold accumulation as well as the selling of dollar denominated reserves in order to protect itself from punitive sanctions placed upon them by both Europe and the U.S..

Putin's largest 'Trump card' is their energy matrix that now includes multiple pipelines across the Middle East that feed directly into Europe.  And contrary to the belief that the dollar is world's primary reserve currency, the reality is that ever since it became coupled with oil back in 1973, energy, much more than the dollar, is the real global currency that runs the financial mechanism of geopolitics.

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